Budget 2016-17 may not bring relief in income tax due to lack of fiscal space
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Chances are high that the budget 2016-17 would not bring relief in Discussions on the crucial budget, which will be unveiled in February, are under way and the numbers are being worked on. "The room on the fiscal front is very limited. Therefore, it is unlikely that there will be any major concessions on the personal income tax side," a government official, who did not wish to be identified, told TOI, adding that some relief may be in store for taxpayers.
The government is faced with a very challenging fiscal situation in the current financial year as well as in 2016-17. Several factors have narrowed the fiscal space. The first is the impact from the rollout of the 7th Pay Commission recommendations. In November, the Pay panel had recommended an increase in pay and allowances of 23.6%, a 24% rise in pensions and onerank-one-pension for central government employees and paramilitary personnel.
These changes are estimated to cost over Rs 1lakh crore to the government in 2016-17, according to
In his 2015-16 budget finance minister
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